A new breed of innovative

businesses are using technology

to disrupt the status quo once
enjoyed by the banks and changing
how people and businesses access,
receive and use financial services
in the process. This is FinTech; and
everyones writing, tweeting and

Dont Bank On It:

The FinTech FX

talking about it.

But perhaps more pertinently what do

businesses and SMEs think of these new
industry pioneers? How do the nimbler
technology-led providers compare to the
traditional banks in terms of customer service
and value? To understand these trends and

SMEs changing attitudes in the

face of technology disruption

the attitudes of SMEs towards the service

offered by banks in comparison to FinTech
specialists, World First undertook a survey of
1,000 senior decision makers at SMEs across
the UK to gather their thoughts, specifically in
relation to FX services.

This short report - Dont

Bank On It: The FinTech FX presents the results

KEY RESULTS

World Firsts research reveals that the message from UK SMEs to high street banks is clear; they
just arent cutting it. When it comes to FX, nine out of ten SMEs (87%) stated that they receive
better service from newer FinTech providers. 89% of UK SMEs using a specialist FX provider would

What we
found out

recommend their services to another business just 35% of those using a bank would do the same.

89%
35%

Three areas in particular where highlighted by UK SMEs as benefits of using FinTech

specialists compared to banks. 85% of those using a specialist said they demonstrated
a better understanding of their business needs, 94% said they delivered a more
tailored proposition whilst 88% said they provided greater transparency on fees.
These results alone are evidence that major banks are coming under increasing
pressure from the new technology-led pioneers.

94%
of UK SMEs using a specialist FX
provider say their proposition is
more tailored to their business
compared to the banks

85%
of UK SMEs using a specialist
FX provider believe they
understand their business
better than their bank

Commenting on the headline results Jonathan Quin, CEO and Co-Founder

of World First said: Whilst SMEs have historically had to rely on the big
banks for any sort of financial service, genuine innovation and technological
development from the FinTech sector has given rise to a wide range of truly
compelling alternatives. This new breed of specialist providers are often better
placed to serve the needs of SMEs than traditional banks, offering greater
flexibility for the user, more transparent pricing and, ultimately, better value.

We buy our orange juice from Spain, our apple juice from Germany and our pineapple
juice from Costa Rica. Everything is coming from all over the world so we end up
needing to buy a lot of dollars and euros.
I was with my bank but I didnt feel I was getting a good service, every time I called up,
they didnt remember who I was. I came across World First and now Ive got really good
customer service, a great relationship and most importantly better rates than my bank.
From our point of view, its a win-win.

Ed Rigg, Founder of Eager Drinks

Lack of awareness
Despite the fact that SMEs using FinTech providers for international
payments are happier with their service, our research showed that
many 31% to be exact remain unaware of the opportunities with

24%

Under one in four (24%) of SMEs in the

North East are aware of alternative FX
providers o
 utside of banks

providers outside their traditional banks.

Worryingly, 30% of those surveyed stated instances where their bank
had been unable to meet their FX requirements, yet 88% of those

53%

affected didnt switch to an alternative provider.

Whilst SMEs in Northern Ireland

stand to benefit as they are the most
aware (53%) of alternatives

Currency volatility continues to remain an important consideration for business managers.

With sterling currently down 10% against the euro since December1, and further volatility likely
before and after the EU referendum result in June, having an effective currency strategy is vital
for businesses looking to limit costs and maximise margins. Evidently, this is a concern for many
SMEs as 70% of those surveyed felt their business could be better prepared to protect themselves
against exchange rate fluctuations.
Jonathan Quin adds: Currency market volatility is ever present, and with the EU referendum
in June and the US election later in the year, is likely to continue. Therefore, much more must
be done to raise awareness of currency risks to SMEs, as well as the benefits of using FinTech
specialist providers. This is particularly true for the mini-multinationals targeting business growth
through international expansion. Until this awareness gap is addressed, UK SMEs the engine of
our economy may be exposed to additional risk and cost, which could impact on them achieving
their potential.

MAKING A DIFFERENCE
FINTECH SPECIALISTS EDGE
TRADITIONAL BANKS

83%

of UK SMEs using a specialist

provider say they offer them a good
range of appropriate products

81%

of UK SMEs using a specialist

provider think their current provider
acts in their best interests

83%

of UK SMEs using a specialist

provider say they are cheaper
than a bank

As of 18th March 2016

Conclusion
Over the last decade, weve seen an influx of

specialist providers. More needs to be done to

them to better manage their foreign currency

pioneering specialists in the FinTech space disrupting

inform SMEs of the choices available to them so

needs in order to protect, and even enhance

the financial industry. In particular, how businesses

they can be best equipped for growth.

their bottom line. By making payments quickly,

get advice on their currency transfer needs has

securely and transparently we provide a fresh

evolved with the rise of technology-led currency

World First are specialists in currency transfers.

experts offering a better service than banks. However,

We combine bespoke technology and people first

lack of awareness remains an issue with many SMEs

principles to provide a cheaper, more agile and

in the dark about how they can benefit from these

more tailored service to our clients which allows

approach to foreign exchange.

Sectors where SMEs are most

let down by banks FX services
Jeremy Cook
Chief Economist at World First

Any business exposed to currency markets

should actively manage its risk market

45%

53%

43%

L AW

MEDIA &
MARKETING

movements can hit your margins or

increase costs without warning. Indeed,
our recent survey suggested that 78% of
UK SMEs trading internationally recognised
that having a proper currency strategy
could improve profitability.

P R O P E RT Y

We would recommend that businesses put

in place an order using a budget rate to
calculate costs on goods bought in other
currencies and expected revenues on
overseas sales. A budget rate is an essential
planning tool as it is a constant used when
forecasting. The rate is often set by using
prevailing forward rates.

Law (53%), Property (45%) and Media &

Marketing (43%) have all experienced being
let down by their banks FX services. Despite
Fashion being the industry least let down

17%

by banks for FX services, 17% still recorded

having been let down in the past.

FA S H I O N

Were an awardwinning, high-growth,

customer-focused
FinTech business.
We help people move
money around the world
and businesses to grow

Get in touch
+44 (0)20 7095 0696
newsroom@worldfirst.com
@world_first